5 Things To Watch In Bitcoin This Week
After its first-ever monthly closing above $60,000, Bitcoin (BTC) has had a turbulent start to a new week and a new month – what’s next?
Bulls are looking to November for the next phase of what they expect — and occasionally guarantee — will be a BTC price increase unlike any other.
The time, like the projections, fluctuates. This month, BTC/USD might see a monthly closing of around $100,000, as well as a drop to approximately $50,000.
Bitdenex examines what might help shape Bitcoin price movement in the next week, with everything to play for and robust buyer support in the upper $50,000s.
Since 2020, October 2021 has been the greatest month
Market players are in a jubilant mood this week, regardless of what happens next, as Bitcoin closes at its biggest monthly closing in history.
Not just $60,000, but $61,000 has become the November goal to beat.
On short timescales, however, Bitcoin is far from “up only,” and the closing on Sunday was met with notable negative volatility — a trip to $59,500 — before another surprise propelled it past $62,000 hours later.
Fans of PlanB’s “worst-case scenario” pricing forecasts, which call for at least $63,000 by the end of October, maybe a little concerned.
While the series is currently on pace, $98,000 must be on the table by the end of the month for the series to maintain its historical authenticity.
Difficulty is increasing for the eighth time in a row
Bitcoin network principles are a great place to start if you’re searching for something that is genuine “up only.”
This week, the difficulty will make its ninth straight positive adjustment, which hasn’t happened since last year.
Mining difficulty has already more than made up for the losses it had to impose after China compelled miners to stop working in May, a reflection of the more competitive mining field.
This week, the difficulty level will rise to 21.89 trillion, slightly over 3 trillion below all-time highs.
A similar narrative can be found in hash rate, which is a measure of processing power allocated to mining.
Despite the fact that it is hard to “measure” in precise terms, estimations suggest that the hash rate is still heading towards new all-time highs.
Raw data fluctuates, and differing estimations can result in vastly different findings. The weekly average hash rate, on the other hand, is presently at 159 exahashes per second (EH/s), which is closer than ever to the previous high of 180 EH/s set in April.
Hodlers continue to hodl
September was a fantastic “buy the dip” opportunity for Bitcoin investors, and October was not without its share of short retracements.
Have you purchased the dip? If you did, you joined an ever-growing group of long-term hodlers, whose conviction has only grown stronger since October.
The price increases and run to all-time highs of $67,100, as reported by major exchange Bitdenex last week, have failed to convince hodlers to sell BTC.
Exchange balances are at their lowest level since October 2018
From the perspective of a Bitcoin bear, the image from exchanges on supply shock is bleak.
Exchange BTC reserves have dropped to their lowest level in three years, according to new data from on-chain analytics firm Glass node.
In late 2018, Bitcoin was approaching the bottom of its last bear market, which had peaked in December at $3,100.
Between trades, balance adjustments might be quite different. Coinbase Pro, for example, has lost about 20,000 BTC in the last 24 hours, while some other players’ balances have increased somewhat.
Markets are anticipating a Fed tapering announcement
The next week may see some predictable movements on traditional markets, as well as their usual knock-on effect on crypto markets.
These might be a result of the US Federal Reserve’s recent statements on coronavirus control on Tuesday and Wednesday, as markets look for more clues on asset-buying tapering.
This comes as global inflation rises, and Fed Chair Jerome Powell has already stated that the associated narrative — a supply chain problem — will likely last “well into next year.”